Candidate Pritzker’s campaign platform for governor in 2018 included a plank that proposed changing Illinois’ flat rate tax system on annual income, currently at 4.95%, to a progressive income tax system. Under a progressive income tax, the marginal tax rates increase as income increases. While this is touted as a progressive tax system, the proposed tax system actually reverts back into a flat tax on those with income in excess of $1 million. The proposal includes a low rate of 4.75% for earnings up to $10,000, and a top rate of 7.95% on income of more than $1 million. Many media outlets have reported on the “fair tax” calculator that was recently released by Governor J.B. Pritzker’s office. The calculator can be found at this website, which you can also cut and paste into your brower:

www.illinois.gov/fairtaxcalculator

Pritzker’s office has claimed that families making about $250,000 or less will not see a tax increase under the proposal, and some will have a slight reduction in taxes. Interestingly, those whose income exceeds $1 million will be subject to a flat tax (with no benefit of lower rate brackets) of 7.95% on every dollar of income. The brackets are as follows:

Taxable income of $0 to $10,000 would be taxed at 4.75%

$10,001 to $100,000 would be taxed at 4.9%

$100,001 to $250,000 would be taxed at 4.95%

$250,001 to $500,000 would be taxed at 7.75%

$500,001 to $1 million would be taxed at 7.85%

Taxable income exceeding $1 million would be taxed at a flat rate of 7.95% on all income